Suppose for its deposit accounts Simplii Financial is offering to pay interest at a rate of 0.25% per month with monthly compounding, but Tangerine is offering to pay interest at a rate of 0.75% per quarter with quarterly compounding. (One quarter is equa

Tangerine is offering a higher rate. To compare the rates offered by Simplii Financial and Tangerine, we need to convert both rates to an annual percentage yield (APY) as it allows us to compare the two rates over a year. For Simplii Financial, the APY would be calculated using the formula: APY = (1 + (0.25%/12))^12 - 1 APY = 0.25% x 12 APY = 3% For Tangerine, the APY would be calculated using the formula: APY = (1 + (0.75%/4))^4 - 1 APY = 0.75% x 4 APY = 3% As we can see, both rates have the same APY of 3%, but Tangerine pays interest only once every three months, while Simplii Financial compounds the interest every month. This means that with Tangerine, the interest earned on the account is only credited once every quarter, while with Simplii Financial, interest is credited every month, allowing for the account balance to grow faster. Overall, Tangerine is offering a higher rate, but Simplii Financial's compounding frequency may be more advantageous for some customers.